Infotech Enterprise weak, Angel maintains ‘neutral’

MUMBAI: Infotech Enterprise opened weak, down almost 2% at Rs 81, in a firm market on Friday. Angel Broking has maintained a ���neutral��� stance on the stock as deteriorating global business environment has clearly worsened and would have adverse impact on Company quarterly performance.

���With a key client substantially reducing business on account of the impact of the slowdown, volume growth has declined this quarter and we believe that being a midsized company, Infotech will find it challenging to manage growth in a worsening environment,��� the brokerage says.

���Going forward, we expect Infotech Enterprises to record a 20% and 5.7% Compounded Annual Growth Rate (CAGR) in topline and bottomline respectively, over FY2008-10 Expected. We expect net profit to decline in FY 2010 on account of slowing revenue growth and margin pressures. We believe it will be challenging for mid-sized software companies to manage growth in this environment. We thus have a Neutral rating on the stock,��� says analyst Harit Shah of Angel Broking.

The company has said that one of its key large clients has shown a substantial de-growth this quarter on account of the impact of the global economic slowdown on its business.